Rallying point: Sensex scales 35,000 in fastest 5,000-point gain

Shares of Asian Paints rose more than two-fold in the second rally of 5,000 points between June 2014 and April 2017. HDFC Bank and HDFC climbed 92% and 74.5% during the same period.

The benchmark Sensex hit yet another milestone on Wednesday, topping the 35,000 mark for the first time in its history. (Reuters)

The benchmark Sensex hit yet another milestone on Wednesday, topping the 35,000 mark for the first time in its history. The broader Nifty-50 also closed higher amid expectations of a recovery in corporate earnings and a revival in economic growth. The Sensex rallied another 310.77 points or 0.89% to close the day at 35,081.82, while the Nifty scaled 88.10 points or 0.82% to 10,788.55. The Sensex completed the latest rally of 5,000 points at a faster pace than the earlier two occasions of adding similar gains. It took only 184 sessions to reach the 35,000 mark from 30,000, as against 712 sessions to get from 25,000 to 30,000. It had taken close to nine times more (1,608 sessions) than the recent rally to reach the 25,000 mark in June 2014. Tata Steel was the biggest index gainer since April 26 last year, when the Sensex touched 30,000, rising 70.5% during the period. HUL and Maruti Suzuki gained 45% each during the same period, while Bharti Airtel and ICICI Bank gained 40% and 36%, respectively. Maruti Suzuki was the star performer with a 169% return during the Sensex’s run from 25,000 to 30,000 in April 2017; the stock has generated handsome returns for investors by participating in the last two rallies of 5,000 points, gaining 291% even as the index added 10,000 points.

Shares of Asian Paints rose more than two-fold in the second rally of 5,000 points between June 2014 and April 2017. HDFC Bank and HDFC climbed 92% and 74.5% during the same period. However, when the index hit 25,000 in June 2014, no financial stock was featured among top five, a sign of the banking sector finding favour in the latter part of the rally. When it comes to powering the Sensex, the financial stocks, ICICI Bank, HDFC and HDFC Bank top the list, together contributing close to 40% of the gain by the Sensex. While the heavy weight ICICI Bank added over 980 points in the latest rally, HDFC Bank and HDFC together added another 980 points. Reliance Industries contributed 808 points to the rally.

According to Bloomberg consensus estimates, TCS, Infosys and private lender IndusInd Bank last week posted quarterly earnings that either beat or matched analyst estimates. While banking stocks regained momentum after the government lowered the additional borrowing requirement for the current fiscal to `20,000 crore from `50,000 crore estimated earlier, software stocks got investors’ attention after Morgan Stanley predicted a turnaround in technology spending this year. Among Sensex stocks, Axis Bank advanced the most on Wednesday, gaining 4.7%, followed by SBI (3.4%) and ICICI Bank and Yes Bank by 2.6% each. Infosys extended the previous day’s gains to also close up 2.6%.